While coal consumption in the United Kingdom continues to slowly grow, largely as a result of increased coal-fired power generation, domestic coal production -- especially from underground mines -- continued its long-term decline. The United Kingdom consumed 68.2 million tonnes of coal in 2006, with approximately 84% used in coal-fired power stations. Nearly all of the 18.6 million tonnes of coal produced in 2006 was for domestic consumption with just over 500,000 tonnes exported. Approximately 50.3 million tonnes of coal was imported, predominantly from Russia (45%), South Africa (35%), Australia, Colombia, and Indonesia.[1]

Since 1977, the domestic coal mining industry has been in freefall. In 1977 over 120 million tonnes of coal was produced in Great Britain, with over 107 million tonnes of that from underground mines. By 2006 underground mines produced just over 9.4 million tonnes. While there was growth in the output of coal from open cut mines during much of the same period, this sector of the industry is now also in decline.[2] With the closure of numerous mines, employment in the industry has fallen to an estimated 5,091 as of March 2007.

While the prospects for the domestic coal industry are bleak, the British Geological Survey reports that in 2006 electricity supplied by coal jumped by over 11%. (Electricity supplied by gas and nuclear power dropped by over 7% in 2006).[1] Whether coal-fired power stations will continue to expand or decline depends on a range of factors including the extent to which new offshore wind stations are established, the carbon price in the European Union Emissions Trading Scheme, the price and security of supply of imported gas and government decisions relating to the construction of new nuclear power stations.

It was reported in June 2011 that Britain's green energy sector produced 27% more electricity in the first quarter of 2011 compared with the same period in 2011 as the rapid expansion of offshore wind capacity started to bear fruit, official figures have revealed. However, at the same time power companies used 7% more coal.[3] UK’s use of coal increased by 32.5% in 2012.[4]

The United Kingdom is Europe's third largest industrial polluter, only behind Germany and Poland. It was reported in November 2011 that air pollution from industry in the UK costs the country €4-11bn a year in health and environmental damage, according to the European environment agency. When CO2 costs are included, the figure goes up to between €11-18bn.[5]

Citizen Activism and Protest

Government Energy Policy

In May 2007, the UK government released a White Paper on the government's proposed future energy strategy. In the chapter on the roles of oil, gas and coal, there was little on offer to the coal industry other than hedged general support. While acknowledging that there were still "significant recoverable coal reserves" in the UK, the reported noted that a number of factors affected the ability for these to be commercially extracted including the costs compared to imported coal, "and the implications of planning considerations including potential environmental impacts." However, it did note that the government had convened a Coal Forum, comprising representatives from the government, coal mining companies, generators, unions and equipment manufacturers "to bring forward ways of strengthening the industry, and working to ensure that the UK has the right framework to secure the long-term future of coal-fired power generation; optimise the use of our coal reserves, where recovery is economic; and stimulate investment in clean coal technologies."[6]

One crucial element in the United Kingdom's future energy mix is what demand and supply side policies are adopted to cover for the retirement of several aging nuclear plants and a number of highly polluting coal-fired and oil-fired power stations. In its White Paper the government stated that "our analysis shows that 22.5GW of existing power stations may close by 2020. Of this, 8.5GW of coal-fired capacity will close to meet the requirements of the EU Large Combustion Plant Directive (LCPD) by end 2015; as will about 2.5GW of oil power stations. Around 7GW of nuclear power stations are also scheduled to close between now and 2020, on the basis of their currently published lifetimes." The report suggested that approximately 20 to 25 gigawatts of new power stations "will be needed by 2020" and that "up to an additional 10GW of electricity generation capacity may be needed by 2030."[7]

In response to the anticipated plant retirements, the government decided that it should seek to encourage further private investment in new power generation plants by publicising new regulations designed to "streamline the planning inquiry process for large scale electricity generation", provide "further details of a competition to develop in the UK demonstration of carbon capture and storage on power generation at commercial scale, and a programme of work to remove regulatory barriers to the development of CCS" and foreshadowed abandoning its opposition to the construction of new nuclear power stations.[7] (See Carbon Capture and Storage Demonstration Project (United Kingdom) for further details).

Carbon Capture and Storage and Nuclear Plants

In November 2009 the U.K. Department of Energy and Climate Change, as part of a plan to decarbonize the power sector by 2030, announced a policy that would ban new coal-fired power plants without carbon capture and storage (CCS). New plants would be required to capture and store CO2 equal to at least 300 megawatts of CO2 emissions from the day they go online, and to capture all their CO2 emissions by 2025. The energy plan also calls for 10 additional nuclear power plants to be built largely on sites where nuclear plants already exist.[8]

To pay for CCS there will be a levy, likely to start in 2011, of about £17 a year per UK household, imposed on electricity suppliers but passed on to consumers. The UK Government is planning to raise £9.5 billion from the levy to subsidize up to four CCS demonstration plants. Details of the first plant will be announced in 2010, and will replace eight plants due to close by 2015 under European rules on air pollution. The levy will run for at least 15 years.[9]

E.ON had announced in October 2009 that it was delaying its plan for a new coal station with CCS at Kingsnorth, Kent. However, given the new government policy, the Kingsnorth Power Station may go ahead and, along with a proposed plant at Longannet in Scotland, is competing to be the first subsidized CCS demonstration project.[9]

Carbon capture funding cuts considered

A GBP2.7 billion U.K. coal gasification power station project that was planned to be capturing, transporting and storing carbon dioxide on a commercial scale in 2016 is on hold until the U.K.'s coalition government clarifies its policy and incentives regime for the technology, Powerfuel chief executive Richard Budge said in an interview. The Labour government enacted a levy on electricity suppliers to fund up to four carbon capture and storage (CCS) pilot projects. But the incentive might be cut due to the pressures of the Comprehensive Spending Review, which will be published Oct. 20, 2010, where the government will detail its proposed cuts.[10]

Although the CCS levy won't directly impact the government as it is a levy on suppliers and ultimately consumers, it would need to be administered by the Department of Energy and Climate Change and Britain's energy regulator Ofgem, and would therefore have an impact on government accounting. The CCS levy was estimated to raise up to GBP10 billion over its 15-year lifespan. Powerfuel had planned to construct the world's first large-scale integrated gasification combined cycle power station with carbon capture capability in two phases with the plant operating on syngas in 2013 in the first phase. By 2015 the power station would have the gasification and carbon capture units installed and then move to full commercial operation in the second quarter of 2016. The plant would be using gasification technology licensed from Royal Dutch Shell.[10]

In addition to Powerfuel's project, Iberdrola SA's U.K. subsidiary ScottishPower and others including National Grid PLC, Shell and Aker Clean Carbon, is developing a plan to scale up its one megawatt prototype CCS test unit at its Longannet coal-fired power station in Scotland. Although the technology to capture and store carbon dioxide already exists, the entire chain has yet to be deployed on a commercial scale and consequently the costs are so high that the projects cannot be built without substantial government support.[10]

2010: Coal subsidies to end by 2018

In December 2010 the EU agreed to cut government subsidies to domestic coal companies by 2018.[11]

2011: UK calls for halving 1990 GHG levels by 2025

On May 17, 2011, the UK government announced legally binding targets to reduce greenhouse gas emissions 50 percent below 1990 levels by 2025. The agreement was informed by the Committee on Climate Change, which calls for 80 percent reduction from 1990 levels by 2050, a recommendation in line with what many IPCC scientists suggest is necessary to avoid the worst impacts of climate change. In 2014, the goal will be reviewed against the European Union’s emissions trajectory and the UK could adjust the target if the country’s reductions are stronger than those in the rest of the EU.[12]

2014: EU agrees to 40% GHG emission cut

In October 2014 EU leaders agreed to cut greenhouse gas emissions by 40% by 2030, compared with 1990 levels.[13]

2015: Climate Coalition pledge

In October 2015, the 3 major UK party leaders signed the Climate Coalition pledge, signaling the UK’s intent to act on climate change ahead of the Paris COP meeting. The pledge included "Ending climate pollution from coal use in the UK."

Scotland's energy Policy

In December 2008, Scotland ministers published what they described as the world's most advanced climate change bill. The proposal is designed to cut Scotland's greenhouse gas emissions by 80 percent by 2050. Although the proposal promises more renewable energy, critics of the plan say much of the focus is on "clean coal".[14]

First Minister Alex Salmond has promised support for the opening of two new coal mines, and his energy minister, Jim Mather, has commented, "Scotland has huge coal reserves which, alongside our renewables potential, could meet Scotland's electricity needs for many years to come." The new energy policy would only require future coal-fired power stations to be ready to capture carbon dioxide, should the technology ever become available.[14]

James Hansen takes UK to task over coal

On January 31, 2009, James Hansen - director of NASA's Goddard Institute for Space Studies and one of the world's foremost climate scientists - published an open letter to Scotland's First Minister Alex Salmond.[15] In the letter, Hansen urges Salmond to issue a moratorium on new coal plants until and unless "any new plant can be guaranteed to operate with full capture throughout its entire life." Hansen also insists that merely requiring carbon capture readiness is not an acceptable policy:

It is a sham that does not guarantee that a single tonne of carbon will be captured in practice. Alternative approaches must be considered which ensure an effective moratorium on new unabated coal power.

On February 15, 2009, Hansen published another article in The Observer, this time lambasting the British government's decision to approve the construction of a new coal-fired power plant at Kingsnorth. Hansen cites the UK, United States, and Germany as the biggest per-capita polluters of carbon dioxide from fossil fuels.[16][17] Calling for a complete moratorium on new coal plants and phase-out of existing ones, he stressed the need for Prime Minister Gordon Brown to act:[16]

The Prime Minister should not underestimate his potential to transform the situation. And he must not pretend to be ignorant of the consequences of continuing to burn coal or take refuge in a "carbon cap" or some "target" for future emission reductions. My message to Gordon Brown is that young people are beginning to understand the situation. They want to know: will you join their side? Remember that history, and your children, will judge you.

Domestic Consumption and Coal-Fired Power Stations

Even if a substantial coal-fired power station building program were to proceed, the prospects for the UK coal industry are limited. A 2004 report by consultants Mott MacDonald for the UK Department of Trade and Industry investigated the impact of the imposition of stricter sulphur dioxide emission standards on the coal sector. They concluded that coal production "would be sustained within a band of 21-29 mt in 2010 and 15-21 mt in 2016". The report noted that the narrow range reflected that the known reserves at existing mines and the "low likelihood that there will be any new major investments in mine capacity."[18]

It noted that most UK coal falls in the high sulphur band of 1.4-2.2% "with an average of around 1.7-1.8%". With stricter European Union sulphur dioxide emission standards being imposed to force power stations to either install flue gas desulpherisation equipment or retire non-complaint stations. The consultants view was that all large power stations "will increasingly need a diet of coal much lower in sulphur than standard UK coal grades."[18] In particular, it noted that the very low sulphur coal from Indonesia -- which has sulphur content of less that o.2% -- would be highly sought after. (See Indonesia and coal for more information on the rapid expansion of coal mining there).

However, the consultants found that where a high price was attached to carbon, nuclear plant lives extended and renewable generation boomed, "coal would be squeezed to very low levels". In this scenario, they considered that coal consumption could drop to 30 million tonnes in 2012 and 12 million tonnes in 2016. It's more optimistic scenario for the coal industry was that carbon prices were low, gas was expensive, nuclear stations decommissioned and limited expansion of renewable energy. In this scenario they considered that "coal could sustain or even increase its share in generation".[18]

Existing Coal-Fired Power Stations

The UK Department of Energy and Climate Change (DECC), as of May 2012, lists seventeen coal fired power stations as operating in the United Kingdom with a total installed capacity of 25,901 megawatts. (Of the seventeen power stations, ten are purely coal-fed while the remainder use coal as one of the fuels burnt). DECC lists the current coal-fired power station in the UK, as of May 2012, as being:[19]

The impact of the European Union Large Combustion Plant Directive on domestic UK coal consumption

In November 2001 the European Union's Large Combustion Plant Directive came into force. The Directive aims to reduce emissions of "acidifying pollutants, particles, and ozone precursors" in order to "combat acidification, eutrophication and ground-level ozone". The Directive regulates emissions from combustion plants with a thermal capacity of greater than 50 megawatts.[20]

The UK Department for Environment, Food and Rural Affairs (DEFRA) notes on its website that "the LCPD aims to reduce acidification, ground level ozone and particles throughout Europe by controlling emissions of sulphur dioxide (SO2) and nitrogen oxides (NOx) and dust (particulate matter (PM)) from large combustion plants (LCPs) in power stations, petroleum refineries, steelworks and other industrial processes running on solid, liquid or gaseous fuel. These pollutants are major contributors to acid deposition, which acidifies soils and freshwater bodies, damages plants and aquatic habitats, and corrodes building materials."[21]

"NOx reacts with volatile organic compounds in the presence of sunlight to form ozone that can adversely affect human health and ecosystems. SO2, NOx and particles can travel long distances from their sources before being deposited onto land, surface waters or oceans, or forming ozone. Emissions from the UK contribute to pollution problems in other Member States, while Germany, Netherlands, France, Ireland and Belgium are the principal non-domestic contributors to sulphur and nitrogen deposition in the UK. A Europe-wide approach to reducing these pollutants and their impact is therefore required," DEFRA states.[21]

In the United Kingdom, the implementation of the Large Combustion Plant Directive requires that plants either install flue gas de-sulphurisation (FGD) equipment or 'opt out' and shut down when they have run for an additional 20,000 hours between 1 January 2008 and 31 December 2015 or at the end of 2015. (Note: the total number of hours in a year is 8,760.)

2015 though E.ON has plans to convert one unit to burn 80% wood and 20% coal.[28]

Slough Power Station 15, 16 & waste heat boiler

197

8444

11556

Recent coal plant closures

Recent coal plant closures are:

the Tilbury Power Station which is owned by RWE nPower PLC and located in Tilbury, Essex. It comprised three units and had an installed capacity of 1,131 megawatts; RWE npower proposed to establish a new is a 1,600 megawatt supercritical coal plant at the site but, in November 2009, announced that it had shelved these plans.[29] It subsequently converted the existing plant to a 750 MW biomass plant and commissioned in early 2012.[30]

Estimated cost of air pollution in Europe

A 2011 analysis by the European environment agency (EEA), 'Revealing the costs of air pollution from industrial facilities in Europe,' estimates that air pollution from industry costs Britain £3.4bn-£9.5bn a year in health and environmental damage. When CO2 costs are included, the figure rises to £9.5bn-£15.5bn. The industrial facilities covered by the analysis include large power plants, refineries, manufacturing combustion and industrial processes, waste and certain agricultural activities. Emissions from power plants contributed the largest share of the damage costs (estimated at €66–112 billion). Other significant contributions to the overall damage costs came from production processes (€23–28 billion) and manufacturing combustion (€8–21 billion). Sectors excluded from the EEA analysis include transport, households and most agicultural activities – if these were included the cost of pollution would be even higher.

A small number of individual facilities cause the majority of damage costs. Three quarters of the total damage costs were caused by the emissions from just 622 industrial facilities – 6 % of the total number. The facilities with emissions associated with a high damage cost are in most cases some of the largest facilities in Europe which release the greatest amount of pollutants. Carbon dioxide (CO2) emissions contribute the most to the overall damage costs, approximately €63 billion in 2009. Other air pollutants, which contribute to acid rain and can cause respiratory problems - sulphur dioxide (SO2), ammonia (NH3), particulate matter (PM10) and nitrogen oxides (NOx) - were found to cause €38-105 billion of damage a year.

Proposed or Possible New Coal-Fired Power Stations

In 2008 the ENDS Report listed eleven proposed new coal-fired power stations.[35]

Kingsnorth Power Station (Proposed) was a 1,600 megawatt supercritical coal plant proposed by E.ON UK with an original notional commissioning date of 2012. In October 2009 E.ON cancelled the project after sustained opposition.[36]

Cockenzie Power Station (Proposed) a 1,152 megawatt supercritical coal plant proposed by Scottish Power. The plant was originally proposed to be commissioned by 2012.[39] In October 2011 Scottish Power announced that plans for the establishment of a new 1000MW gas-fired plant at the site had been approved.[40]

Hatfield Power Station, a 900 megawatt proposed coal gasification project proposed by Powerfuel with a notional commissioning date of 2013. Following a corporate restructuring, the project has been renamed the Don Valley Power Project. In May 2011 it was announced that the company had submitted a bid for funding from the European Union's 'New Entrant's Reserve' for demonstration CCS projects. (The scheme is commonly referred to as the NER300 fund). Powerfuel have also announced a proposed 450 MW gas-fired power station with CCS. The Don Valley Project, the company states on its website, has been "awarded €180 million of EU funding in 2010 and planning permission was awarded in 2009. National Grid is currently permitting a pipeline to take the CO2 offshore to North Sea storage sites. The project currently expects to be operational by the end of 2016" with an estimated total cost of "up to £5 billion".[42]

Killingholme Power Station (Proposed), a 450 megawatt proposed coal gasification project proposed by E.ON UK that is currently on hold. While the company first mentioned that a feasibility study on a new coal plant was being undertaken in 2007[43][44], there has been no mention of it since. However, C.GEN have proposed another project near Killingholme (see below); and

Hunterston Power Station, was a proposed 1600 megawatt (MW) coal-fired power station at Hunterston. The power station has been proposed by Ayrshire Power.[45] In June 2012 the company announced that it was "withdrawing its planning application and withdrawing from the current CCS demonstration project funding competitions. APL has taken this decision due to the level of uncertainty surrounding the ability to secure the necessary financial investment to build the power station in the foreseeable economic climate." It flagged that it might revist the proposal at a later stage.[46]

Caledonia Clean Energy Project in Scotland. In March 2012 the Summit Power Group from the US announced that it had entered into an agreement with National Grid and Petrofac to seek funding from the UK government’s Carbon Capture & Storage Delivery Competition. The company announced few details of the project other than that it was proposing to build a "commercial-scale" coal-fired plant to produce electricity and hydrogen for commercial customers with the captured carbon dioxide "transported via pipeline to St. Fergus by National Grid Carbon and then transferred offshore for geological sequestration deep under the North Sea by Petrofac subsidiary, CO2DeepStore."[47] At the end of October 2012 the Department of Energy and Climate Change announced that the project had been short-listed as one of four bidders "for the next phase of the UK’s £1bn Carbon Capture and Storage (CCS) competition."[48]

North Killingholme IGCC Project was proposed by C.GEN in March 2011. The company states that the plant being studied would have an installed capacity of 520 megawatts with possible fuels varying from coal to a blend of "unconventional hard coal", petcoke and wood/biomass or even as a pure gas-fired plant. In a presentation on the project, C.GEN states that it owns land adjoining the existing Killingholme power station. The company stated in early 2011 that Parsons-Brinkerhof "started permitting procedure 2010" and that in February 2011 it had filed an application to the European Union's New Entrant Reserve scheme for funding proposed CCS projects. The company claims that the project could be in "commercial operation" by 2015-2016.[49] The company's website refers to the project as a 475 megawatt plant which could be "either as a Combined Cycle Gas Turbine (CCGT) or as an Integrated Gasification Combined Cycle (IGCC) plant, allowing for carbon capture and storage capabilities to be retrofitted." The company also states that "the target date for the start of commercial operation is 2016-2017."[50]

Teeside IGCC power station (Teeside Low Carbon) is a proposed 450 megawatt IGCC plant with pre-combustion capture on a brownfield site on Teesside. The project has been proposed by Teeside Low Carbon, a consortium comprising BOC, GDF SUEZ, Premier Oil and Progressive Energy. The consortium has stated that it expects that it will "make an investment decision in 2014, subject to appropriate planning and other regulatory approvals."[51] At the end of October 2012 the Department of Energy and Climate Change announced that the project had been short-listed as one of four bidders "for the next phase of the UK’s £1bn Carbon Capture and Storage (CCS) competition."[52]

White Rose CCS Project is a proposed 426 megawatt coal-fired power station with carbon capture and storage. In February 2011 a consortium of Alstom UK Ltd, Drax Power Limited and National Grid announced that they were seeking EU NER300 funding for a new oxy-fired CCS demonstration project based at the site of the existing Drax Power Station. The initial media release stated that National Grid, "together with an experienced offshore partner, will develop a transportation system out to the southern North Sea where the CO2 will be permanently stored."[53] In late October 2012 the Department of Energy and Climate Change announced that the project had been short-listed as one of four bidders "for the next phase of the UK’s £1bn Carbon Capture and Storage (CCS) competition."[54]

Coal Exports

Current coal exports from the UK are limited to approximately 500,000 tonnes. Nor are there any reasonable prospects for exports to expand. At present there is only one coal export berth for loading coal onto ships and the UK coal would not be competitive at anticipated international coal prices. "It is unclear," the consultants note, whether there would be many European buyers who would take UK coal, with its higher sulphur and ash contents and its low CV" [calorific value].[18]

Coal Imports

UK coal imports were up 20 per cent to 18 million tons in 2012 — with coal responsible for generating 42 per cent of all UK electricity, according to its Department of Energy. Forty per cent of imported supplies are from Russia.[56]